There is a revolution in Kenya that parallels the banking system and the broadband revolution but is something entirely its own: the cellular revolution. There were only four million cellphone users three years ago in Kenya. In 2010, in a country of nearly 40 million people, there were over 25 million cellular subscribers. The effects of this revolution are being seen across the country. Contract laborers can now provide employers with a number to call instead of waiting for a job to come up, and fishermen and farmers are now using their phones to check market prices, saving them lengthy trips to town. But this revolution goes far beyond just improving efficiency of daily tasks.
In a developing nation like Kenya, there have always been alternative currencies within a cash-only society. But now, Safaricom, Kenya’s largest cellular provider and one of the nation’s largest companies, has created a booming alternative currency. This is the first time the cellphone has become a medium for a floating currency.
Called M-Pesa, this payment option allows you to pay your water and electricity bills, purchase items from online M-Pesa stores, deposit or withdraw cash from your M-Pesa account via ATM, and send M-Pesa via text or “SMS” to other people. Once, I even paid a cab driver by quickly messaging him the fare.
Getting M-Pesa might seem confusing at first. First, you buy a phone and a Safaricom SIM card. If you get the SIM card from a licensed store, you will have to register your card with Safaricom, providing them with a copy of legitimate type of identification. If you get the SIM card from any of the thousands of small shops and kiosks that are not licensed, your account will be completely anonymous. After getting the card, you buy something called M-Pesa airtime; 100 shillings gets you 100 M-Pesa and so forth. The M-Pesa is a thick, green paper card that varies in size depending on the amount, like bills in most countries. For example, 1000 shillings is the largest amount you can purchase per card, and it is physically the largest card, about the size of a credit card.
Safaricom also is compatible with smart phones. You can have your iPhone unlocked at one of the two authorized Apple retailers in Nairobi or buy one here pre-unlocked so that you can slip in a Safaricom micro-SIM card. The phone will then function on airtime. You can then use the airtime to purchase a variety of Internet bundles to keep you connected.
Many residents in Nairobi use this system to send money to their home villages without a hassle. Kenyans abroad can even access it to send remittances. And those who don’t have credit cards or bank accounts – but whose numbers are significant – are now able to shop online and order pizza even when they do not have cash.
But the cellular revolution in Kenya goes beyond just the creation of a digital currency. Safaricom is reinventing the broadband revolution to fit their users’ lifestyles – through a new service called Kipokezi. Launched in 2010, Kipokezi’s use of SMS messaging allows users to send emails without using and having to pay for a 3G database.
In 2010, only about four million residents had “access to online services.” However, the rising number of cellphone users now have the ability to receive emails without Internet through Kipokezi.
Nevertheless, cellular theft and fraud have become major problems with M-Pesa. When I first got to Nairobi, I was warned to not let anyone hold my phone because they could quickly transfer all of my airtime without me knowing it. However, Safaricom started a campaign to help protect against such problems by sending messages to all unregistered numbers, urging users to properly register.
The cell phone in Kenya is simultaneously replacing computer technology and banking systems. Perhaps this technology will thwart the ability of a broadband revolution to occur here at all. In the meantime, in this largely computer-less, cash-based society – the cellphone revolution is on.